ERAFP AND THE CLIMATE
PAST AND FUTURE
TEMPERATURE
CHANGES
The Paris Agreement
targets the limiting of
global warming by the
end of this century to
significantly less than
2°C, or if possible to less than
1.5°C, i.e., a 70 to 80% reduction
of greenhouse gases by 2050
and zero emissions by 2100.
between 2°C and 7°C
between now and 2100,
compared with the average
from 1850 to 1900
0.85°C between 1880
and 2012
CAR B
ON E
At the current rate of
greenhouse gas emissions,
the carbon budget set by the
IPCC1 for the period from 2012
to 2100 will be used in less
than 25 years.
COMBUSTIBLE
In order to limit global warming to
2°C, only one third of the world’s
fossil fuel resources and reserves
can be burnt.2
To limit global warming, 71.9% of global resources will need
to be left unextracted between now and 2050, i.e.3 :
1/3
of oil
reserves
50%
of gas
reserves
+ de 80%
of coal
reserves
CARBON RISK
According to a study assessing the
cost of inaction, global warmingrelated losses would be colossal:
There are three types of carbon
risk.
• in a +2°C scenario: $4,200
billion of assets would be under
threat,
• in a +6°C scenario: $14,000
billion of assets would be under
threat (i.e., 10% of existing assets
worldwide).
the consequences of climatic events
on infrastructures, corporate value
chains, real estate assets, etc.
responsible. Such procedures are
likely to affect carbon extractors and
the main carbon emitters the most.
1. Physical risks
3. Transition risks
policy changes, new regulations, the
withdrawal of fossil fuel subsidies
and the implementation of a price for
carbon will lead to the revaluation of a
wide range of assets.
2. Liability risks
demands for compensation by
parties that suffer climate changerelated losses from those they deem
Intergovernmental Panel on Climate Change
2
International Energy Agency
3
«The geographical distribution of fossil fuels unused when limiting global warming to 2°C» by Christophe McGlade & Paul Ekins
1
HOW DOES ERAFP MANAGE
CARBON RISK?
Because we cannot manage what we do not
measure, for the last three years ERAFP has
been calculating its equity portfolio’s carbon
footprint.
In 2015, it extended this calculation to its
government and corporate bond portfolios,
thereby covering around 87% of its
total assets.
100%
50%
0%
0%
19 %
23 %
37 %
It also measured the alignment of its equity
portfolio’s energy mix with the energy production
breakdown defined in the International Energy
Agency’s «2°C» scenarios for 2030 and 2050.
ERAFP is already in line with the
proportion of fossil fuels under the
2030 «2°C» target.
5%
8%
Others
55 %
Renewables
36 %
18 %
15 %
44 %
59 %
Nuclear
17 %
44 %
Fossil
20 %
0%
Consolidated Composite
ERAFP
index
portfolio
Global 2°C
2030
COMBUSTIBLE
Global 2°C
2050
SHAREHOLDER ENGAGEMENT
Notably within the framework of preparations for COP21 in Paris, ERAFP lobbied via the IIGCC for
the following:
•the mandatory publication by institutional investors, particularly those in the public
domain, of their exposure to climate risks;
•the introduction of a price for carbon.
In 2016 / ERAFP supported 11 climate-related shareholder motions and held carbon strategy
talks with three issuers from the utilities sector and one energy-sector company.
ERAFP takes part in various collaborative initiatives and an investor
coalition on the climate change theme:
www.rafp.fr
/
@_ERAFP_ /
/